12/22/2005 @ 3:00PM

Inside The Forbes NBA Valuation List

NBA franchise values continue their steady climb, up 9% on average this year to $326 million. Fueling the growth on the revenue side is the NBA’s push outside the U.S., with games reaching 215 countries and territories this season; revenue rich new arenas in Memphis and Charlotte replacing their outdated predecessors; and a crop of young superstars, like LeBron James and Dwyane Wade, making their teams playoff contenders. Also, the NBA’s current TV deals with
The Walt Disney Co.
and
Time Warner
represent a 25% boast over the previous contracts.

As for expenses, the NBA and its players reached a collective bargaining agreement last summer that set the amount that players receive in salary and benefits at 57% of revenue. If costs exceed that threshold, players give up part of their salary in the form of an escrow tax. There are no better two words for a sports franchise than “cost certainty” (maybe “world champion,” but cost certainty is a close second).

On the court, the Knicks have been an embarrassment in recent years but still are the most valuable team in the NBA, because New York’s passionate fans paid $74 million for tickets last season–the most in the league. Luxury suites at “The World’s Most Famous Arena” cost $450,000, and courtside seats cost close to $2,000 per game. Fans continue to show up at Cablevision-owned
Madison Square Garden despite the Knicks having the second-worst record in the NBA this season.

Great players explain why the Miami Heat (Shaquille O’Neal) and Cleveland Cavaliers (LeBron James) shot up in value during the past year. Those stars turned their teams from also-rans on and off the court into playoff contenders with revenue in the top half of the league.